A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Most qualified plans, whether or not top heavy, must contain provisions that meet the top-heavy requirements.
A plan is top heavy for any plan year for which the total value of the accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees.
Top-heavy rule exception:
The top-heavy plan requirements do not apply to SIMPLE 401(k) plans or to safe harbor 401(k) plans that consist solely of safe harbor contributions.